Volkswacht Bodensee - Stocks waver, dollar drops as Fed seen halting rate rises soon

The dollar hit a year-low against the euro and 10-month trough versus sterling after official data this week showed high inflation slowing in the United States, fanning hopes that the Federal Reserve would soon stop hiking interest rates.

Oil prices firmed, winning support from tight supplies.

Stocks advanced "on increasing signs that the global round of interest-rate hikes could be drawing to a close", noted Richard Hunter, head of markets at Interactive Investor.

In a sign of cooling inflation elsewhere, Singapore's central bank kept rates steady Friday, having previously hiked five times in a row.

And data showed Swedish inflation fell slightly in March as energy cost hikes receded. Nevertheless, consumer price increases remained in the double digits at 10.6 percent, a level similar to annual British inflation.

The high rate of inflation in the eurozone ought to come down over the coming months, European Central Bank President Christine Lagarde said Friday, but warned there was "considerable uncertainty" around the forecast.

The US inflation data reassured investors that the country's economy could be heading for a soft landing, even though minutes from the Fed's March policy meeting revealed some officials see a mild recession this year.

Focus turned to the release of US retail sales, which fell one percent in March, while the corporate earnings season kicked off in earnest.

- Mixed outlook -

On Wall Street, stocks were mixed after opening following the release of the retail sales data.

Major US banks reported higher profits despite recent upheaval in the sector, with JPMorgan Chase reporting a jump in first-quarter profits.

However, it also warned of a potential economic downturn as it added $1.1 billion in reserves in case of bad loans.

"All that waiting and all the subsequent reporting has not derailed the stock market this week," said Patrick O'Hare from Briefing.com, of the data-heavy week.

Traders are keenly awaiting banks' outlook statements in light of the upheaval in the banking sector last month that saw three US lenders go under and Credit Suisse bought by rival UBS.

The Paris CAC 40 stocks index of leading French companies hit a record-high above 7,500 points at the start of trading Friday, thanks in part to strong earnings Thursday from luxury group LVMH.

Shares in London and Frankfurt were also in the green.

- Key figures around 1350 GMT -

Paris - CAC 40: UP 0.6 percent at 7,529.04 points

London - FTSE 100: UP 0.7 percent at 7,898.61

Frankfurt - DAX: UP 0.7 percent at 15,833.56

EURO STOXX 50: UP 0.7 percent at 4,394.84

New York - Dow: UP 0.1 percent at 34,076.56

Tokyo - Nikkei 225: UP 1.2 percent at 28,493.47 (close)

Hong Kong - Hang Seng Index: UP 0.5 percent at 20,438.81 (close)

Shanghai - Composite: UP 0.6 percent at 3,338.15 (close)

Euro/dollar: DOWN at $1.1024 from $1.1050 on Thursday

Pound/dollar: DOWN at $1.2464 from $1.2526

Dollar/yen: UP at 133.13 yen from 132.65 yen

Euro/pound: UP at 88.44 pence at 88.20 pence

Brent North Sea crude: UP 0.6 percent at $86.60 per barrel

West Texas Intermediate: UP 0.7 percent at $82.84 per barrel

burs-kjm/lth

L.Janezki--BTB